One of the most persistent issues in the vendor/channel community is the level of relationship between the two. Specifically, how deep should vendors and their channel partners be in each other’s business? If a vendor is too hands-off, its channel partners might accuse it of not helping—or caring—enough to make them successful. If the vendor is too hands-on, its channel partners might accuse it of trying to steal their customers and sabotage their success.
This was one of the many issues ‘keeping people up at night’ in our recent April channel executives roundtable. PartnerPath invited 16 executives from IT vendors ranging in size, market position and sales model to confidentially and anonymously discuss their problems, challenges and successes in their business and their channel partners.
The question of, “how engaged should vendors be with their channel partners?” brought about some interesting answers that also delved into the roles vendors believe their channels should play, both with them (the vendor) and with their customers.
Owning the Solution
Should partners be simply a conduit for leads, with the vendor the owner of the IP and, as such, creator of the solutions? Or should partners be the primary point of contact with customers, with the vendor serving in a technology-fulfillment capacity?
“Intellectual property should always be with the vendor,” said one roundtable participant. “If you start moving your intellectual property out the door, you’re toast. You’ve become irrelevant. You’ve become a commodity, so we [vendors] need to keep the intellectual property.”
Other participants believed channel partners should have a deeper role to play in the sales process beyond being a middleman of sorts. Such a scenario, where the channel partner is simply a medium for the IP, can lead to a less-than-seamless experience for customers—who, at the end of the day, don’t care where the technology comes from, as long as it solves their problem.
White-labeling the Solution
At the same time, some participants said they sometimes “white-label” their products and solutions because, though they want to own the IP, it’s not necessary for the end-customer to know who built it. The vendor’s customer in this case is the partner. The partner needs to value the product/solution, add it to their solution stack and keep selling it to customers. That’s where the value lays, not in the brand.
However, another participant with widespread brand recognition mentioned his company does not white-label their products. “We still have a lot of value in the brand,” he said. To him, their brand is so strong that to remove the name weakens the sale. Also, “it affects co-marketing with partners.” Getting his internal teams to support white-labeling would be a really hard sell because there is hesitance to give marketing and enablement to partners that could be used to sell other vendor solutions than their own. “You hope there is going to be reciprocity.”
But no matter how close (or up in each-other’s business) the relationship is between the vendor and the partner, the needs of the end-customer can’t get lost. “The customer doesn’t want [just] hardware or software,” noted another participant. “They want an outcome. So who’s building the freaking outcome?”
Do you look for partners to create their own IP using your products and solutions? Do you allow them to white-label? Let us know what you think and check back for more thoughts from our recent roundtable.